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Justice sues to block Anheuser-Busch InBev from buying Grupo Modelo

By Michael J. De La MercedThe New York Times

Posted:
02/01/2013 12:01:00 AM MST

Updated:
02/01/2013 01:23:10 AM MST

The Justice Department sued Thursday to block Anheuser-Busch InBev's proposed $20.1 billion deal to buy control of Grupo Modelo of Mexico, arguing that the merger would significantly reduce competition in the U.S. beer market.

The deal, announced last summer, would add Corona Extra to the company's formidable stable of brands, including Budweiser and Stella Artois.

But the Justice Department said in its lawsuit, filed in U.S. District Court in Washington, that allowing the merger to proceed would reduce competition in the beer industry across the country as a whole and in 26 metropolitan areas in particular. The combined company would control about 46 percent of annual U.S. sales, the government said, far outpacing Anheuser-Busch InBev's closest competitor, MillerCoors.

"Even small price increases could lead to significant harm," William J. Baer, head of the Justice Department's antitrust division, said on a conference call with reporters. "We took this action today because we believe the acquisition is a bad deal for American consumers."

The deal is the biggest to be opposed by the Justice Department since 2011, when it sued to block AT&T's proposed $39 billion takeover of T-Mobile USA.

The government's move is the first significant effort to halt widespread consolidation in the beer industry in some time. Anheuser-Busch InBev itself was the product of a blockbuster merger between two of the world's biggest brewers.

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